For several years it has seemed as if Google were able to defy gravity with its astonishing, continuous growth rate. This has led to what many has called an arrogant attitude towards customers, analysts and competitors alike; Google has simply not needed to act in a service-minded manner in order to attract new users and customers – and the money from advertising just keeps pouring in anyway.
Lately, there have been some indicators that the company is becoming more ‘normal’, judging by what has been happening at the Googleplex in Mountain View, California.
Earlier this year, Google announced a partner reseller programme to boost the distribution of their Google Apps Premier Edition. This marked a new step in the effort to compete seriously with Microsoft’s Office applications. Users can now get (real) service and support if they choose to buy the Google products via a partner. According to Forrester, this means three things for professional users:
- Google is serious about making money with Google Apps Premier Edition.
- Google can make money at $40/user/year, which bodes well for the future.
- The Google Apps portfolio will just get stronger.
At the same time, Google released another update which didn’t receive much attention: that their Standard Apps Edition (= the free one) will now only support up to 50 users (down from 100 until recently, and before that 200). Why? “(…) to get more premium accounts that pay $50/user/year” (quoting TechCrunch).
For enterprise buyers of Google Apps this is likely to be good news as Google is becoming more focused on not being a one-product company (revenue-wise at least), which makes all its money on ads. At the same time, Google has started to look more vulnerable, with the recent lay-offs, relocations and product shut downs. However, these efforts could actually also be positive for professional Google Apps users. Google now tries to focus its efforts on the products most likely to be profitable, which we touched on earlier with the shut-down of Lively.com.
While Google Apps may still have a long way to go, Google is now putting more effort into actually making money from the service and not just treat it as yet another hobby product from the Labs. The big question that still needs to be answered: Is Google Apps really an alternative to Microsoft Office? What do you think?